Market is definitely there, especially China with expected growth of 30% p.a in membranes. Looking forward to FLC kicking bigger and bigger goals in this market over the next 6-12 months. Havn't gone through the doc completely yet.
Technology providers
Technology providers are central to unlocking greater efficiency in industrial and other uses of water. However, in a fragmented institutional framework governing the water sector, longterm innovation and product development take place in a world of uncertain returns. As a consequence, water technology has traditionally not been driven by a global resource economics view and water technology has often been the by-product of other sectors, such as energy.
Yet the water sector provides tremendous opportunities for technology providers to “define” the options available on the cost curves. The cost curves can help inform technology providers of the relative position, cost, and opportunity of their technologies, compared to efficiency and supply alternatives. They can show the sensitivities of demand as a function of cost improvements that may be achieved in the technology. And they can provide benchmarks for the introduction of technologies that are not yet featured in the cost curves. Particularly where cost curves are steep at the margin—as is the case in South Africa and Brazil—there is significant room for innovation to deliver lower-cost solutions.
Desalination, for example, is growing fast globally. However, with its high per-unit cost, it only forms part of the least-cost solution in some basins of the South Africa case study, with unit costs of between $0.60 and $1.30 per m3. Expansion of desalination at times of energy scarcity therefore calls for further improvement of the most efficient available technologies, particularly membranes that lead to an improved energy efficiency, and energy recovery systems. Such improvements could bring costs of desalination to ~$0.50 per m3 by 2020. In extremely arid regions such as the Arabian peninsula, the potential for additional, nextgeneration technologies is starting to emerge, including such technologies as zero water discharge schemes or the use of sea water for toilet flushing. The cost curves set the benchmark against which these technologies have to perform, and they can provide a basis on which their prospects and benefits can be discussed with policymakers to foster support.
In China, membrane technology has the potential to play a critical role in addressing the challenge of water quality that goes beyond the immediate challenge of making enough quantities of raw water available for the different users. Today, the penetration of wastewater treatment is low, even leaving around 15 percent of wastewater treatment plants under-utilized as the networks are lacking to collect and transport the wastewater to plants. Rising environmental pressures as well as limited availability of additional water supply in water-scarce basins like the Hai, Huang, and Huai basins makes wastewater treatment—and wastewater reuse—an increasing concern and major challenge for China over the coming decades.
At between $0.50 and 0.70 per m3, membrane technology today is still some two to three times more expensive than traditional, more-prevalent bio-treatment technologies. Membrane technology offers superior quality, making it particularly relevant for environmentally-sensitive areas such including water derived from industrial development areas and decentralized treatment, and reuse. Naturally, estimating market sizes out to 2030 requires making a number of aggressive assumptions. Our assumptions for impact on China’s water situation combined with insights on sub-markets, point towards a market for low-pressure membranes in China that could serve a volume of 85 billion m3 by 2030, 56 times the 2005 volume. The most striking increases will occur in municipal clean-water treatment, the largest segment in 2030, reflecting an annual growth rate of over 30 percent between 2005 and 2030. (see Exhibit 40).
Technology providers.
Innovation in water technology—in everything from supply (such as desalination) to industrial efficiency (such as more efficient water reuse) to agricultural technologies (such as crop protection and irrigation controls)—could play a major role in closing the supply-demand gap. Also, many of the solutions on the cost curves developed for each country imply the scale-up of existing technologies, requiring expanded production on the part of technology providers. The cost curves provide a framework that technology providers can use to benchmark their products and services for an estimate of their market potential and costcompetitiveness with alternative solutions. Membrane technology, for example, is still 2-3 times more expensive in China than traditional treatment technologies. As the need for high-quality water treatment increases, specifically for potable or high-quality industrial use or re-use, lowpressure membrane technology could develop a market potential of up to 85 billion m3 by 2030, 56 times its volume in 2005.
FLC Price at posting:
38.0¢ Sentiment: Hold Disclosure: Held
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